Matthew's Journal

The below is all semi-informed guesswork.

Prior to the card readers, an attacker just needed to steal your web login details to steal money from your account. This can be done e.g. with a trojan on your computer that runs long enough to pick up the full details where you only enter partial information on each login.

With card readers, then an attacker *also* needs some way to construct the correct response to the issued challenge. If it's possible to clone the chip on a C&P card, then an attacker could do this, e.g. with a trojaned C&P machine in a shop. But the vector for doing that and the vector for stealing your login details are very different, so it'll be much harder - probably you'd need to operate a big database, grab people's details opportunistically, and hope that a few of them would match up. If it's not possible to clone the chip, then the only attack is to steal the card.

So I think they're worthwhile, and I think (Nationwide's adminstrative incompetence aside) that they've implemented it in basically the best way they could.